Freeze taxi fares to protect customers: IPART

The independent pricing body IPART has recommended the NSW government continue to set the maximum fares taxis in Wollongong and other urban areas can charge. Picture: Robert Peet
The independent pricing body IPART has recommended the NSW government continue to set the maximum fares taxis in Wollongong and other urban areas can charge. Picture: Robert Peet

The government should continue to set maximum taxi fares in Wollongong and other urban areas “for the purpose of protecting customers”, according to an independent body.

The Independent Pricing and Regulatory Tribunal (IPART) recommended the NSW government freeze rank and hail taxi fares in urban areas to avoid customers being overcharged.

This would maintain the maximum fares for a taxi hailed from the street or caught from a taxi rank rather than letting each companies set their own prices, which is the case when it comes to pre-booked taxis.

The fare freeze would include taxis in Wollongong, Sydney, the Blue Mountains, Newcastle and Central Coast.

“We maintain our view that taxi service providers and licence holders could have the ability to raise prices above efficient costs, and/or reduce supply or service quality in these areas,” the IPART report stated.

IPART also found that the growth of rideshare services had not yet created enough competition in the Wollongong market to allow taxis to set their own fares.

... taxi service providers and licence holders could have the ability to raise prices above efficient costs ...

IPART report into taxi fares

“This growth has increased the overall size of point to point transport market, with a relatively small impact on total demand for taxi services,” the report stated.

“Taxis continue to maintain a significant market share in the Urban Fare Area.”

However, continued rapid growth of the rideshare market could soon remove the need to regulate taxi fares and licences.

Taxi licence prices were too high according to IPART – one owner in the Illawarra had been trying unsuccessfully to sell his licence for $80,000.

To overcome that, IPART proposed that from 2020 taxi licences should be available on demand for a small fee.

“This would give taxi service providers opportunities to operate more flexibly, lower their licence lease costs, encourage more people to catch taxis through more competitive pricing (and) respond to increasing demand,” the report stated.

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